Money-saving expert Martin Lewis has stepped in to clear up widespread confusion surrounding new Department for Work and Pensions (DWP) rules announced in the recent Autumn Budget.
What caused the confusion?
Following Chancellor Rachel Reeves's first Budget for the Labour government, a major announcement was made regarding the removal of the two-child limit on benefits. Martin Lewis, founder of MoneySavingExpert.com, noted that this had "caused confusion" among the public, with many mistakenly linking the change to Child Benefit payments.
He was quick to provide a clear distinction, stating: "The Government has announced it's ending the two-child benefit limit, but there's a lot of confusion about what it is. So here is a bit of a primer. It is nowt to do with Child Benefit, a universal payment for every child you have."
Key changes to Universal Credit explained
The core of the change focuses squarely on Universal Credit. Lewis explained that the two-child limit, often incorrectly referred to as a cap, has meant that families claiming Universal Credit did not receive any additional funds to cover the costs of a third or subsequent child.
This controversial policy will now be scrapped from April 2026. Lewis clarified the impact, saying: "This is what is being scrapped in April, so they will get more benefits if [they have] extra costs from more children." This means eligible families will receive increased support for all children in their household from that date.
The benefits cap remains in place
In his breakdown, Lewis was careful to highlight a third element that is not changing: the overall benefits cap. He informed his readers that this separate rule, which sets a maximum total amount a household can receive in benefits, remains firmly in place.
"Separately there is also a Benefits Cap, which, in simple terms, is a max amount you can get on benefits (including Universal Credit and Child Benefit)," he wrote. The cap for families, couples and single parents outside of London is £1,835 a month, with a higher rate applying within Greater London.
This clarification ensures that while some families will see an increase in their Universal Credit from 2026, no household's total benefits will exceed the legislated cap.
